Lawrence Kudlow: 'Government Is Subsidizing Non-Work'

Renowned economist Larry Kudlow says while the nation's job numbers are up, the government hasn't stopped the "hemorrhaging" of Americans leaving the labor force — because it gives so much money away.

"Part of it is Baby Boomer retirement. But a lot of it is the government is subsidizing non-work," Kudlow, a CNBC senior contributor, said Monday on "The Steve Malzberg Show" on Newsmax TV.

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"People at the margin, who might grab a job, have walked away from a job because the government benefits are quite substantial.

"The eligibility has been lifted by [President Barack] Obama, the time frames have been extended by Obama."

Kudlow said while the government giveaways were started under President George W. Bush, "Obama continued it."

"So if you pay people not to work, they're going to be awfully picky in taking a job and what we're seeing is they'd rather not work and that's plaguing this whole story," he said.

"The rather generous welfare state [is] going way beyond the safety net. Don't get me wrong, I'm in favor of a safety net, but what we have now is food stamps, welfare, disability insurance.

"We've gone beyond the safety net and that's one reason why the labor force participation rate is rock bottom and the other one is the employment to population, also fell."

Kudlow said the country is desperate for real economic growth.

"Ronald Reagan taught us that weakness at home leads to weakness abroad and that has plagued Obama for five years plus," he said.

"The first order of business for the Republicans should be economic growth, growth, growth, growth."

He said he believes the GOP will reclaim the Senate in the midterm elections.

"They ought to put … two bills, on the president's desk within 90 days. One should be slashing the corporate tax rate from 35 to 20 percent and with that no more double tax on foreign profits, repatriate those earnings," he said.

"Second … a Keystone XL Pipeline authorization bill. Take the power from the White House and put it back in Congress. This is how they got the Alaska pipeline through many years ago.

"The GOP takes Congress and you will see animal spirits lifted, new incentives to promote business investment and job creation, and maximize the oil energy revolution."

Is Kudlow sure the president would sign such bills?

"He'll be forced to because Democrats are going to vote for that bill even though they'll be in the minority," he said.

"If he doesn't, it sets the Republican agenda for the coming Congress and the 2016 election. That's the key. Set the agenda."

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